Why Investment Grade Bonds?

Corporations have taken advantage of the low interest rate environment, not just issuing more bonds but longer maturity bonds; allowing them to lock in low rates of funding for extended periods. The need for yields higher than those of low yielding government bonds, and improving corporate fundamentals, have driven the performance of investment grade corporate bonds.

Investment grade corporate bonds provide risk aware investors exposure to corporate debt of a higher credit quality. Investors can gain exposure to leading companies across financials, utilities, industrials and other sectors, across emerging and developed markets. Investment grade debt carries lower credit risk but allows investors to earn a consistent yield. It can be used to seek stability whilst pursuing income.

 

Reasons to consider Investment Grade Bonds

 

1BlackRock 26/05/16: As represented by the Barclays Global Aggregate Corporate Bond Index.


Fund Name

iShares Global Corporate Bond ETF (AUD Hedged)

Index Name: Barclays Global Aggregate Corporate Index (AUD Hedged)

Management Fee

0.26%

Ticker

IHCB








What: The Fund aims to provide investors with the performance of the Index, which seeks to provide exposure to investment grade corporate fixed rate bonds issued by corporations in emerging and developed markets.

How: The Index provides a broad-based measure of the performance of the global investment grade corporate fixed-rate debt market. The index is market capitalisation weighted and consists of bonds with a minimum maturity of at least one year.

Why: In anticipation of capital appreciation and the potential of a regular income.


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